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Investments

9 Months Ended

Sep. 30, 2023

The Company follows the provisions of Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, and for its non-financial assets and liabilities subject to fair value measurements. ASC 820 provides a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards that permit, or in some cases, require estimates of fair-market value. This standard also expanded financial statement disclosure requirements with respect to a company’s use of fair-value measurements, including the effect of such measurements on earnings. The cost of securities sold is based on the specific identification method.

The Company determines the fair value of its government securities, asset-backed securities, municipal bonds, and corporate bonds by utilizing monthly valuation statements that are provided by its broker. The broker determines the investment valuation by utilizing the bid price in the market and also refers to third party sources to validate valuations, and as such are classified as Level 2 assets.

The Company's certificates of deposit are classified as available for sale and are considered as Level 1 assets. These investments are carried at cost, which approximates fair value.

The Company also periodically makes technology investments in certain non-consolidated third parties. These equity investments are accounted for in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company's share of the earnings or losses of non-controlled affiliates, over which the Company exercises significant influence (generally a 20% to 50% common shares ownership interest), is included in the consolidated operating results using the equity method of accounting. The Company has also made technology investments in certain non-consolidated affiliates for common share ownership interests of less than 20% (where the Company does not have the ability to exercise significant influence). These equity investments are accounted for in accordance with ASC 321, Investments - Equity Securities. For these equity investments that do not have readily determinable fair values, and where the Company has not identified any observable events that would cause adjustment of the valuation to date, the equity investments are held at cost.

Such technology investments totaled approximately $125.3 million and $69.5 million as of September 30, 2023 and December 31, 2022, respectively. On March 9, 2023, the Company purchased a 15% equity investment in Adasky, LTD. for $21.5 million. On July 5, 2023, the Company purchased an additional 12% equity investment in Adasky, for an additional $21.5 million. Adasky is an Israeli-based leading developer and manufacturer of intelligent thermal sensing technologies. $2.2 million and $3.8 million of these technology investments are classified within Short-Term Investments in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. $123.1 million and $65.7 million of these investments are classified within Long-Term Investments in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

Assets or liabilities that have recurring fair value measurements are shown below as of September 30, 2023 and December 31, 2022:

As of September 30, 2023:


			Fair Value Measurements at Reporting Date Using
	Total as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	September 30, 2023		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	260,633,625	$	260,633,625	$	—	$	—

Short-Term Investments:
Certificate of Deposit	989,198		989,198		—		—
Corporate Bonds	1,927,301		—		1,927,301		—
Government Securities	5,176,215		—		5,176,215		—
Municipal Bonds	2,409,861		—		2,409,861		—
Other	4,723,625		1,256,600		3,467,025		—
Long-Term Investments:
Asset Backed Securities	21,064,870		—		21,064,870		—
Certificate of Deposit	740,950		740,950		—		—
Corporate Bonds	50,484,099		—		50,484,099		—
Government Securities	28,297,530		—		28,297,530		—
Municipal Bonds	47,583,725		—		47,583,725		—

Common Stock	1,386,988		1,386,988		—		—
Total	$	425,417,987	$	265,007,361	$	160,410,626	$	—

As of December 31, 2022:


			Fair Value Measurements at Reporting Date Using
	Total as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	December 31, 2022		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	214,754,638	$	214,754,638	$	—	$	—
Restricted Cash	4,000,000		4,000,000		—		—
Short-Term Investments:
Certificate of Deposit	1,736,163		1,736,163		—		—
Corporate Bonds	5,473,341		—		5,473,341		—
Government Securities	4,423,041		—		4,423,041		—
Municipal Bonds	5,174,773		—		5,174,773		—
Other	2,347,602		1,093,602		1,254,000		—
Long-Term Investments:
Asset-backed Securities	18,829,696		—		18,829,696		—
Certificate of Deposit	238,925		238,925		—		—
Corporate Bonds	36,310,477		—		36,310,477		—
Governmental Securities	36,532,634		—		36,532,634		—
Municipal Bonds	48,430,166		—		48,430,166
Common Stock	293,300		293,300		—		—
Total	$	378,544,756	$	222,116,628	$	156,428,128	$	—

The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of September 30, 2023 and December 31, 2022:

As of September 30, 2023:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	1,000,000	$	—	$	(10,802)	$	989,198
Corporate Bonds	1,982,128		—		(54,827)		1,927,301
Government Securities	5,198,015		—		(21,800)		5,176,215
Municipal Bonds	2,431,031		—		(21,170)		2,409,861
Other	4,723,625		—		—		4,723,625
Long-Term Investments:
Asset Backed Securities	21,273,402		—		(208,532)		21,064,870
Certificate of Deposit	750,000		—		(9,050)		740,950
Corporate Bonds	53,814,699		—		(3,330,600)		50,484,099
Government Securities	29,640,890		—		(1,343,360)		28,297,530
Municipal Bonds	51,881,686		378,802		(4,676,763)		47,583,725
Common Stock	1,637,386		2,311		(252,709)		1,386,988
Total	$	174,332,862	$	381,113	$	(9,929,613)	$	164,784,362

As of December 31, 2022:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	1,750,256	$	—	$	(14,093)	$	1,736,163
Corporate Bonds	5,571,417		—		(98,076)		5,473,341
Government Securities	4,476,613		—		(53,572)		4,423,041
Municipal Bonds	5,223,500		—		(48,727)		5,174,773
Other	2,347,602		—		—		2,347,602
Long-Term Investments:
Asset-backed Securities	19,151,229		—		(321,533)		18,829,696
Certificate of Deposit	250,000		—		(11,075)		238,925
Corporate Bonds	40,410,206		—		(4,099,729)		36,310,477
Government Securities	39,637,461		—		(3,104,827)		36,532,634
Municipal Bonds	53,476,883		235,713		(5,282,430)		48,430,166
Common Stock	292,638		662		—		293,300
Total	$	172,587,805	$	236,375	$	(13,034,062)	$	159,790,118

Unrealized losses on investments as of September 30, 2023, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value of Investments
Loss duration of less than one year	$	1,340,283	$	51,123,646
Loss duration of greater than one year	8,589,330		103,252,208
Total	$	9,929,613	$	154,375,854

Unrealized losses on investments as of December 31, 2022, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value of Investments
Loss duration of less than one year	$	4,816,103	$	77,701,146
Loss duration of greater than one year	8,217,959		76,643,586
Total	$	13,034,062	$	154,344,732

Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The guidance modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. The Company utilized the guidance provided by ASC 326 to determine whether any of the available-for-sale debt securities held by the Company were impaired. No investments were considered to be impaired during the periods presented. The Company has the intention and current ability to hold its debt investments until any amortized cost basis has been recovered.

Fixed income securities as of September 30, 2023 have contractual maturities as follows:


Due within one year	$	10,502,575
Due between one and five years	98,587,270
Due over five years	49,583,904
	$	158,673,749

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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